Francesco Scarnera, Chief Executive Officer at iBe TSE
I remember the first time I used a fingerprint scanner on a laptop I’d been given for work and it wasn’t exactly the most satisfying experience. It was a ‘slot style’ fingerprint reader (it may have been this model) and even after ‘enrolling’ my index finger five times, the little window just to the right of the touchpad was absolutely infuriating.
Fast forward ten years and my iPhone’s fingerprint scanner works like a dream. In fact, today, I’ve had the pleasure of trying FaceID on an iPhone X where I don’t even have to touch a button to unlock my phone and use my online banking service. We really are living in the future!
Except that we’re not; at least, not consistently. There are a host of authentication methods available, as well as a number of things operating in the background that make the process easier – dare I say ‘frictionless’ – for all of us. Now, there are many organisations that are leading the charge and others that barely provide a welcome or onboarding process.
We recently reviewed around fifty of a broad range of these identity services providers, their products, operating models and market position. The theory was that by examining the most disruptive companies, we would be able to paint a picture of what is already available as far as identity management is concerned and who provides what type of services.
There were some unexpected findings when we looked at these companies, as well examples of some really great innovation. Almost 20% of these organisations didn’t provide any kind of onboarding or introduction to the technology or company itself. Unless you’re Apple and have incredibly intuitive technology, this is risky. If people misunderstand your tools, miss a feature or it isn’t user-friendly, they might not use online services correctly.
Not surprisingly, everyone we reviewed provided some kind of mobile or online access. This was a big relief; we’re in the 21st Century and our financial technology should reflect this! Just over half (55%) provide some kind of geolocation or IP address tracking technology, to make sure that users in the UK aren’t logging in from Bogota, for example – or if they are, it’s because they’re on holiday.
We looked at the more ‘back end’ technologies in some detail as well. 78% of organisations have comprehensive KYC (Know Your Customer) measures in place to verify that customers really were who they said they were – a must-have for basic fraud prevention. Some were using savvy methods – for example, databases to help prevent money laundering, fraud blacklists or even publically available lists like electoral rolls. Using this background information is very smart, because doesn’t slow processes down a great deal. Similarly, this information can be cross-checked with location data in real time to provide an additional assurance that fraud is not happening during individual purchases, for example.
Now for the fun stuff; 44% made use of fingerprint technology, 30% were compatible with face recognition technology, and one even looked at ‘behavioural’ patterns like keyboard and mouse usage. That’s some sophisticated tech!
We have heard rumours about companies putting research and development budgets into either DNA or blood tests to check identity, but none of the companies we looked at were using this kind of technology … yet. Of course, one of the issues is that whilst fingerprint scanners and facial recognition algorithms are relatively easy to create, DNA tests are still relatively expensive, difficult to procure and do slow processes down.
Overall, identity and authentication remains a constant challenge for all of us in the industry; methods that are incredibly secure are often relatively cumbersome – for example, using card readers to authenticate individual e-commerce transactions would be exceedingly secure, but would also stop many consumers shopping online. It’s an incredible challenge to find the balance between preventing fraud, keeping consumers secure and making their lives easier – but that’s why this industry is so interesting!